"Alarmingly low" number of people are saving for a pension

Only four in ten people in their forties are saving for a pension, according
to new research by Which? Money.

The "alarmingly low" figure emerged following a survey of 1,200 people, the consumer group said. The survey showed that only 40 per cent of people aged between 35 and 44 are making any pension provision for their retirement. This rises to 41 per cent for people aged between 45 and 54.

Only among those in their last decade of work does the figure rise to above 50 per cent, Which? said.

Ian Robinson, a pensions expert at Which?, said: "Without adequate saving, it's a sad fact that many of today's workers will face a disappointing pension gap. Our research shows that a single person hoping to receive a post-tax retirement of income of £1,500 per month will need to have saved a pension pot of £230,000 by the time they reach 65.

"If they buy an index-linked annuity, to protect their pension income against inflation, the figure rises to £370,000. The only way for most people to accumulate these sums is to save regularly – and start early."

The research also shows that only 6 per cent of 16 to 24 year olds are saving for retirement. The figure rises to 38 per cent for 25 to 34 year olds.